GENERAL FUND Officials fear that Girard faces fiscal 'breaking point'

The mayor's fiscal plan isn't working, a state auditor's representative said.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- The city is in a troubling financial situation as the general fund continues to bleed red, a representative of the state auditor's office says.
"I have a concern," Unice Stevenson Smith, the auditor's project manager for local government services in northeastern Ohio, said Tuesday.
Smith expressed her pessimism about city finances during a meeting of the Girard Financial Planning and Supervision Commission.
The commission has existed since 2001, when the city was placed in state-imposed fiscal emergency.
Unbalanced opinions
Despite Smith's assessment, Mayor James J. Melfi pointed out the year isn't over, and he expects to end the year in balance.
Smith, however, told the oversight commission that the general fund will end the year with a $435,034 shortfall.
The city began the year with an accumulated general fund deficit of nearly $1.2 million. Girard will end the year nearly $1.6 million in the red, she pointed out.
City Auditor Sam Zirafi cautioned that if the city doesn't right itself fiscally this year and in 2005, it will run out of cash.
Smith called on Melfi to revise his cost-reduction plan into a workable recovery plan because the current blueprint to get the city in the black isn't working. Melfi agreed to rework the plan.
"The city is going in the wrong way," she added.
Commission member John Anderson agreed with Smith's assessment, noting that the fiscal problem is on the increase and "it's going to come to the breaking point."
Some of the problems
Melfi explained that there has been a dramatic increase in workers' compensation premiums and the cost of employee health coverage has skyrocketed.
"We're disappointed where we are today," the mayor said, but he expressed optimism because the year isn't over.
If the Trumbull County Common Pleas Court approves, $162,000 in the water fund from harvesting trees on city-owned property will be transferred to the general fund, he explained.
Girard also will be entering into a contract with the Regional Income Tax Authority, thus putting the city out of the tax collection business.
There is only one employee left in the tax department who will be transferred to other duties. The city will save about $70,000 annually beginning in January by paying the authority 3 percent of the collections, Melfi said.
Also, the city won't have to pay $66,000 annually to two businesses that had overestimated their tax liabilities. The city has been paying them back over the past few years.
Levy pessimism
No one at the meeting expressed optimism that two 3-mill safety forces levies on the Nov. 2 general election ballot will receive voter approval.
The levies are designed to maintain current services.
If they aren't passed, Melfi said, there will be added layoffs in the fire department. Two police officers who make up the police detective bureau will be assigned to street duty.
yovich@vindy.com